Tuesday, November 20, 2012

In a shocking declaration computer maker Hewlett-Packard
Company(NYSE:HPQ) has said that there were substantial instances of financial
fraud related to its acquisition of software firm Autonomy in 2011.

The company said that the transaction for which it paid
more than $10 billion would lead to write-downs worth $8.8 billion in non-cash
charges. In effect the company is writing down close to 90 percent of the value
of the transaction.

The announcement overshadowed its results for the
October quarter, which was ahead of Street expectations.

In a statement HP said, “HP is extremely disappointed
to find that some former members of Autonomy’s management team used accounting
improprieties, misrepresentations and disclosure failures to inflate the
underlying financial metrics of the company, prior to Autonomy’s acquisition by
HP. These efforts appear to have been a wilful effort to mislead investors and
potential buyers, and severely impacted HP management’s ability to fairly value
Autonomy at the time of the deal. We remain 100 percent committed to Autonomy
and its industry-leading technology.”

In the quarter to October HP posted revenue of $30
billion, down 7 percent from a year ago, or 4 percent adjusted for currency,
and a bit below the Street consensus at $30.4 billion.

Non-GAAP profits were $1.16 a share, two cents better
than the Street at $1.14.

For FYQ1 ending in January, the company sees non-GAAP
profits of 68-71 cents a share, well below the Street at 85 cents.

Shares of HPQ have slumped 13% in early session.

Green Mountain Coffee Roasters Inc.(NASDAQ:GMCR) has appointed
Coca Cola executive Brian Kelley as its Chief Executive, replacing Lawrence
Blanford who has been at the helm since 2007.